By PEYTON HOWELL, MHA, SVP, AmerisourceBergen Corp., & President, Global Sourcing and Manufacturer Relationships
Solidification of Trends Occurring in the Public & Private Sectors
Overall, economic pressures are going to continue, and with Congress still divided, it’s going to be difficult to make dramatic changes — especially to programs like Medicare. As a result, we’re going to see more focus on the regulatory side, and with regards to Medicare, providers are going to have to watch out for the potential threat of additional cuts in reimbursement. In addition, possible proposed legislation could grant authority for government to negotiate prescription drug prices for Medicare.
Manufacturers will share in these challenges as cost pressures are going to force them to really demonstrate the value of their products far beyond the FDA approval process. As a result, we will continue to see the incorporation of comparative effectiveness research (CER) and healthcare effectiveness outcomes research (HEOR) data in coverage decision-making. Manufacturers could also see possible proposed legislation or regulation to address drug shortages, likely along the lines of forcing them to continue production, or mild incentives around stimulating production, of drugs in limited supply.
We’re going to see a shift that could, in the short term, bring on additional challenges as both public and private payers attempt to move away from fee-for-service towards more bundled payment arrangements. This will be a difficult transition for providers in the short-term as they try to remain whole through the process.
As a result, manufacturers will need to continue to support patients and providers in new ways. This means, in the end, manufacturers will not just compete on price, but also on services and the value or health outcomes their treatments offer. It’s still unclear whether we’re going to see more at-risk models emerge in the U.S., but if we do, manufacturers will have a very direct role in the risk and outcomes of those treatments.
Accountable care organizations (ACOs), medial homes and other new payment models are encouraging the creation of new care models that include both vertical and horizontal integration across providers. Recent data suggests one in 10 patients in the U.S. now is served through an ACO or other integrated delivery models as both public and private payer approaches continue to grow. This growth means physicians, hospitals, pharmacies and other care models must work together in new ways — including financial alignment and focusing on quality and outcomes.
How Manufacturers Can Succeed in the Evolving Healthcare Marketplace
While the post-election landscape does present many challenges in terms of healthcare reform, there are many things manufacturers can do to prepare for the changes on the horizon — including gaining a solid understanding of all the key players: the payers, providers and patients.
First and foremost, expanding managed markets access strategies is critical, including generating health outcomes and economic data to support the value proposition of their products. This was a critical step regardless of the election outcome, but now that we know the ACA is moving towards full implementation, this clarifies that at least in the short term, data is likely to become more important to government payers than it is for private payers.
Secondly, manufacturers need to invest in services that support healthcare providers, such as reimbursement triage, patient education and training, adherence programs, etc. The coverage hurdles that patients have to reach are going to grow — and this will create extra work for providers as a result. This will be difficult for providers as they are already operating in a constrained environment, and reimbursement and cost pressures will add additional challenges. Manufacturers should be looking for ways to offer backing for services providers are not reimbursed for and don’t have the staff to support.
Thirdly, modeling the cost impact and outcomes analysis of treatment modalities and looking at new payer contracting strategies are key opportunities for manufacturers. And lastly, as Medicaid expands and state insurance exchanges are implemented, manufacturers will have the opportunity to redesign patient access programs and reimbursement support services to reflect the changes to coverage configuration.
As healthcare reform moves forward in this difficult economic environment, there will be many challenges — from state-specific issues and challenges as insured patients try to gain coverage, to new types of payer pressures and an increased need for manufacturer contingency strategies that support market access for their products. If manufacturers understand the players and put the right strategies in place, they will be poised for success as elements of the ACA are implemented.